Essex Schools Funding Formula Review

Archive for the month “April, 2015”

The finance review group met today in Chelmsford to consider the following elements of the school funding formula in Essex:

English as an Additional Language

Sparsity Factor

Primary : Secondary Funding Differential

Key Stage 1 Class Size Adjustment

English as an Additional Language

Following modelling from the LA, we agreed to two changes to the way EAL will be funded in Essex. Firstly, we are proposing to concentrate the funding into a single year, so schools receive a substantial sum for one year rather than a smaller sum each year over two years; the thinking here is that children with high EAL needs need intensive, quick, support to enable them to access the curriculum. Secondly, we are proposing to keep the rate of funding for each EAL pupil constant going into 16/17, not the size of the total EAL pot (as has been the case to now) thus allowing the EAL funding pot to track the EAL need.

Sparsity Factor

The “Sparsity Factor” is a relatively recent factor provided by the DfE to enable LAs to fund small schools “in areas where they are genuinely needed”. The DfE’s view of “genuinely needed” appears to revolve around the relative population sparsity. Unfortunately, in my view the current parameters LAs have been given by the DfE make this factor something of a pig’s ear. For each school, the average over all pupils of the difference in distance between that pupil’s closest school and their second-closest school is calculated. If this average is at least two miles, funding is awarded. Thus it is possible to have two nearby schools, one with sparsity measure 1.99 miles and another with sparsity measure 2.00 miles, the former receiving nothing while the latter receives a handsome lump sum. This would be paid for by shaving the lump sum (or, less likely, the AWPU, of other schools.) In addition, funding can be awarded as either a number-on-roll-independent figure (the meeting considered anything from £25k to £100k) or as a tapered value. A single lump sum creates a severe perverse incentive not to grow (or even to shrink) schools, as a school with 151 pupils would be considerable worse off than a school with 149 pupils, for example. A tapered value mitigates against this incentive, but it still exists because while the school gains in AWPU per new pupil, it loses in tapered sparsity. I presented (with the help of Richard Thomas from ASHE, who lent me his projector) some plots of to illustrate these points. I argued that if we keep the lump sum value as a genuine reflection of the fixed costs involved in running a school, then we can avoid all these problems. It was agreed to maintain our lump sum and not implement a sparsity factor.

Primary : Secondary Funding Differential

It has been known for some time that Essex funds its primary schools at a lower rate compared to its secondary schools when compared to many other counties. Our ratio is 1:1.31 (i.e £1.31 to secondaries for £1 to primaries) whereas the national average is in the region of 1:1.27. The LA presented some startling figures to show the impact of moving the funding differential to 1:1.27. While primaries would do well, of course, secondaries would be hit so hard that it would be impossible to support the Minimum Funding Guarantee through AWPU reduction alone, and lump sum would have to be reduced for the secondary sector. The recommendation from the LA was therefore that if we wished to move towards a national average funding differential, this should be staged over years.

Richard Thomas (ASHE) noted the severe pressure faced by the secondary sector at the moment, especially in those schools with sixth forms, due to very significant reduction in post-16 funding. He also argued that if a national funding formula mandates a move to a differential in the region of 1:1.27 it will be done in stages anyway.

I said that I could see two reasons to change the funding differential: to avoid radical swings in funding in the secondary sector if a national funding formula is brought in quickly, and to improve the quality of outcomes in primaries in Essex. On the presumption that Mr Thomas is correct about a staged introduction, the main reason to be considered is the latter, and we have not yet been presented with data about the relative performance of primary and secondary sectors in LAs with different funding differentials; I asked for this data, so that an informed decision could be made in the future.

Key Stage 1 Class Size Adjustment

The LA has asked whether we wish to retain the KS1 class size adjustment contingency since the relaxation of the statutory requirement on 30 children in a KS1 class. It was decided to retain the contingency. I asked the LA to check the criteria for accessing this fund to ensure that there are no stipulations about minimum school size, which I believe there have been in the past, and to propose to remove them if there were. This was agreed.